2. Job evaluation
• Job Evaluation is a system wherein a particular job
of an enterprise is compared with its other jobs. In
the present industrial era, there are different types
of jobs which are performed in every business and
industrial enterprise.
• Kimball and Kimball define job evaluation as – an
effort to determine the relative value of every job
in a plant to determine what the fair basic wage for
such a job should be.
3. OBJECTIVES OF JOB EVALUATION
• To secure and maintain complete, accurate and impersonal
descriptions of each distinct job or occupation in the entire plant.
• To provide a standard procedure for determining the relative worth of
each job in a plant.
• To determine the rate of pay for each job which is fair and equitable
with relation to other jobs in the plant, community or industry?
• To ensure that like wages are paid to all qualified employees for life
work.
• To promote a fair and accurate consideration of all employees for
advancement and transfer.
• To provide a factual basis for the consideration of wage rates for similar
jobs in a community and industry and
• To provide information for work organization, employees, selection,
placement, training and numerous other similar problems. In fact the
primary purpose of job evaluation is to set wages.
4. Methods of job Evaluation
• Ranking Method
• Job Grading or Job Classification Method
• Factor-comparison Method
• Evaluation of Various Methods
5. Employee Remuneration
• Employee Remuneration refers to the reward or
compensation given to the employees for their work
performances. Salaries constitute an important source
of income for employees and determine their
standards of living.
• “If you pick the right people and give them the
opportunity to spread their wings - and put
compensation and rewards as a carrier behind it - you
almost don’t have to manage them.” — Jack Welch
6. Methods of Remuneration
• Time Rate Method:
• Remuneration is directly linked with the time spent.
• A Pre-decided amount hourly, daily, weekly or monthly.
• Time Rate method leads to quality output.
• Piece Rate Method:
• Remuneration is linked with pieces produced.
• Emphasis is more on quantity output.
• The per unit cost of production is low.
7. Components of Remuneration
• Job Description
• Made up of responsibilities, functions, duties, location of
the job and the other factors like environment, etc.
• Job Evaluation
• Factors like Experience, Qualifications, Expertise and
Need of the company.
• Salary Surveys
• Different companies in the same industry are paying for
similar roles ? ? ?
8. Factors Affect Compensation
• Macroeconomic Situation
• Firm's Performance Vs. Performance of the Economy.
• Demand – A Particular Skill
• Premium skills like Consulting and Accountancy.
• Position of the Company in the Business Cycle
• ESOP’s or Employee Stock Option Plans.
• Urgency of the Firm
• Wants Employees to come on board as quickly as possible.
9. Wages
• According to Prof. Benham, “A wage may be defined as
a sum of money, paid under contract by an employer to a
worker for services rendered.” Thus, remuneration or
reward of a labourer engaged in production for the
physical or mental work is known as wage in Economics.
Determination of Wage
Demand for labour & Supply of Labour
Wage Structure
• Skill Based
• Competency Based
10. Wages – Concepts
• Minimum wage:
• For the nourishment of the worker’s family, for his
efficiency, for the education of his family members, for
their medical care and for some amenities.
• Fair Wage depends upon:
• Productivity of labour & Prevailing rates of wages
• Level of the national income & its distribution
• Living Wage:
• Not only the food, clothing and shelter but a measure of
economical comfort, including education for his
children, protection against ill-health, and a measure of
insurance.
